Optically coded position transducers are well known in the art, such as that shown in U.S. Pat. No. 4,546,466. Such transducers have been used in the prior art together with systems that employ either time--or wavelength--multiplexing signal systems to carry all of the signals representing the transducer position information. An optical system using coherence multiplexing is disclosed in a paper entitled Coherence Multiplexing of Fiber-Optic Interferometic Sensors, by J. L. Brooks et al, Journal. of Lightwave Technology, Vol. LT-3, No. 5, October, 1985, page 1062, which shows a serial arrangement of interferometers that employs a portion of an interferometer for sensing and requires at least two fibers. In this system, the amplitude of the electrical signal put out by the photodetectors depends not only on the parameter being measured, but also on many other factors. Effectively, the photodetector "sees" the whole system.